Hanwha Aerospace Expands Overseas Defense Production

Hanwha Aerospace, a domestic defense company, is expanding its defense production bases internationally to strengthen its export strategy. On Oct. 20, the company announced plans to establish production facilities, research and development partnerships, and strategic alliances with local governments and industries in major markets, following Representative Lee Boo-hwan's recent visit to Germany.

Germany, a key defense nation in Europe, presents an opportunity for further expansion should a local production base be secured. The company is currently in the process of selecting a factory site in Germany. Australia is home to Hanwha Aerospace's first overseas production base, where they manufacture H-ACE self-propelled howitzer and armored vehicle components.

In Poland, Hanwha Aerospace is forming a joint venture with WB Group, Poland's largest private defense company, to produce guided missiles, specifically the CGR-080 with an 80-kilometer range. This partnership aims to commence full-scale production by the end of 2028, following the completion of production facilities, technology transfer, and personnel training.

A similar venture is underway in Romania, where Hanwha Aerospace has commenced construction of H-ACE Europe. The factory will produce K9 self-propelled howitzers and K10 ammunition resupply armored vehicles, with plans to incorporate a support system for maintenance, repair, and overhaul (MRO). The goal is to boost the localization rate to 80% by collaborating with over 30 local Romanian companies.

In the United States, Hanwha Aerospace is focusing on self-propelled howitzer and ammunition production. They recently secured a contract to supply 6 units of K9 wheeled self-propelled howitzer (K9MH) prototypes for the US Army's Mobile Tactical Cannon (MTC) program. The company is also investing $2.2 billion in Arkansas to establish a production facility for 155mm artillery shell components and propelling charges, creating approximately 400 jobs over the next 7 years.

While expanding production bases offers benefits such as meeting procurement requirements, securing a foundation for long-term logistics support, and fostering local supply chains, it also incurs substantial costs and challenges. These include country-specific licensing, local regulations, technology transfer scope, and securing skilled personnel. The ultimate goal is to connect local factories to actual follow-up orders and profitability improvement, moving beyond the stage of establishing production facilities.